Why 90,000 People Applied for 1,000 Grueling Summer Bank Internships

Ah, summer intern season. The subways fill with lost young people, sweaty from their ill fitting suits and heavy backpacks. If you find yourself downtown, push them towards the nearest investment bank, they are lost and need help getting there.

Summer internships at these financial institutions are brutal: long hours, difficult work young people are generally unprepared for and competitive intern classmates. Not that long ago, an intern actually died when pulling consecutive all-nighters. Yet, these are still some of the most coveted internships in the world, leading to some of the most respected (and lucrative) jobs in the financial industry.

The Wire spoke to one former summer analyst who said that the application process itself is quite brutal. "For Barclays, you can only apply online. For UBS, it helps to go through an employee. Most finance internships are through referrals. The online thing is a big black abyss." Our anonymous analyst received their internship role through an elite internal referral, landing on the top of the application pile.

This year, the summer internships were even tougher to come by.Businessweek found that 24 percent of undergraduate business school students were aiming for financial internships. Consulting internships were ranked popular as well, but a distant second with only 12 percent of students interested. Graduate students are in a similar situation, with 26 percent of MBAs aiming for financial careers according to the Graduate Management Admission Council.

The pay for these positions is, as far as summer internships go, quite good. The Wire polled a number of former investment bank interns to determine salary estimates. Payment is prorated from annual salaries. For an undergraduate, their analyst salary could be $70,000 a year, so for their summer internship (generally nine-to-ten weeks) they are earning just over $1,300 a week. For those with Masters degrees, it's closer to $85,000, so over $1,600 a week. MBAs are the most highly paid at $120,000, which evens out to $2,300 per week — not too shabby to earn almost $25,000 in one summer. Sometimes overtime pay is involved, and there are also housing bonuses. If they are later hired from the internship class, there is usually a handsome signing bonus involved, about $15,000 for undergraduate hires.

The actual hiring process has become more difficult coming out of internships, as well. Another summer analyst who went on to receive a job offer told The Wire, "They used to just hire the whole [intern] class and put them into a generalist program. You came back as a full-timer and rotated again, basically, then found your spot. But now you have to be hired directly to a desk, otherwise you're out. In extreme cases, they'll hire someone as a generalist, but that's not a good spot to be in."

Even if you make it through the internship application process, you may find yourself out of luck when it comes to hiring and the end of your tenure. So if you spot one of these determined youngsters out this summer, buy them a beer (or have them buy you one, they can certainly afford it.) And tell them to get back to work. Their managing director needs that chart right away.